How CJ George of Geojit BNP Paribas transformed a small company into a big brokerage firm

It was on a whim that CJ George, Managing Director of Kochi-based Geojit BNP Paribas, who was pursuing his doctorate, started broking firm Geojit as a partnership with Ranajit Kanjilal in 1987. George took sole control of the venture after Kanjilal's retirement and took Geojit public in 1994.

In the 25 years since he launched the venture, George pioneered many innovations that have today become norms in the Indian financial sector. Geojit was the first to do away with sub-brokers. It launched internet trading in the country, entered the Middle East and took BNP Paribas as a partner. George tells Radhika P Nair his journey of making a small Kerala-based company into one of the most respected brokerages in the country:

THE BEGINNING

I was working with a broking firm before I launched Geojit and was fed up with the way the industry was run. The brokers and sub-brokers were doing their own trade and cheating clients. So we decided not to do trading. Even today, after 25 years in this industry, I have zero investment in stocks. We decided we will do an honest execution service. The timing was perfect as India was just opening up in the late-80 s and early-90 s and the stock market became important. We grew along with the economy.

PIONEER

We did away with sub-brokers and started franchisees in 1996, thus retaining control of client's money. In 2001-02 , Sebi went through our system extensively and made sub-brokers into franchisees for others as well. Today, out of 540 offices , 350 are owned by us and the balance is franchisee-run . When National Securities Depository (NSDL) was started, we were among the first to become members in 1996. The most important contribution we made to the country is to introduce internet trading, in February 2000. Now internet trading contributes 35% of our volumes. We were also the first Indian brokerage to launch in the Middle East and now have a presence in the UAE, Saudi Arabia, Oman and Kuwait.

PARTNERSHIPS

In 1995, the Kerala State Industrial Development Corporation (KSIDC) acquired a 24% stake in the company, the only instance of a government entity acquiring a stake in a stock broking company. In 2005, Rakesh Jhunjhunwala took 14% stake and in 2007, BNP Paribas acquired 33% after extensive due diligence. This was an achievement for us as they chose us over brokerages in Mumbai . We also started a joint venture with BNP in institutional trading. But this was dragging our financials down, so BNP acquired our stake late last year. This has helped improve our financials and the second quarter (FY2012-13 ) profit is at Rs 45.31 crore against Rs 6.05 crore in the same period last year.

WAY AHEAD

We are again in the midst of major changes. There have been three questions always-where , when and how to invest. In the eighties 'how' was the most important question. Now, with mobile and computers, execution of trade is in your hand. Now, the most important questions are 'where' and 'when' . So we are in the process of converting every customer-facing employee into an advisor, training them and making certifications compulsory. In two years, we will move completely to an advisory-based service.